1. United Nations Economic Commission for Europe Role of Regulatory and Institutional Reforms in Meeting the Challenges of Globalization Paolo Garonna Officer-in-Charge

2. United Nations Economic Commission for Europe Outline Increasing demand for better regulation in the context of globalization Fighting Red Tape: the need for institutional reforms From global to local and from local to global: different levels and directions in regulatory reform The new tools of the information society: soft regulation, peer pressure, benchmarking The role of civil society and the private sector for good governance and institutional reform

3. United Nations Economic Commission for Europe Increasing Demand for Regulatory Frameworks Appropriate institutional and regulatory frameworks are needed in order to reap the full benefits of globalization Examples: - Health: prevent contagion and react to pandemics - Security: fight against terrorism - Transition to the market economy: institution building and public administration reform - Standards for Transport and the Environment (UNECE) - Financial sector reforms

4. United Nations Economic Commission for Europe Fighting Red Tape and Over-regulation: the Need for Institutional Reforms Barroso to launch Brussels’ biggest deregulation campaign: more than 60 draft proposals set to be scrapped (Financial Times, 14 Sept 2005)

5. United Nations Economic Commission for Europe The Quality of Regulation in the ECE Region (Economic Freedom of the World Indicators, 2005)

6. United Nations Economic Commission for Europe What has determined the different patterns and quality of regulatory reforms in the formerly centrally planned economies? - The interplay between reforms and economic development - The natural resources curse: success stories in overcoming the curse - Regional economic integration (e.g. EU accession) The Transition to the Market Economy: the Key to Success

7. United Nations Economic Commission for Europe Progress on Reforms and Economic Development Note: Progress on reforms in ECE member countries is measured by the average of the EBRD Transition Indicators Scores, 2004. ECE

8. United Nations Economic Commission for Europe Life Expectancy and Regulatory Quality Regulatory quality Life expectancy at birth (years) Regulatory quality Life expectancy at birth (years) Global ECE

9. United Nations Economic Commission for Europe Poverty Reduction and Regulatory Quality Poverty headcount (% of total population) Regulatory quality Global Regulatory quality Poverty headcount (% of total population) ECE

10. United Nations Economic Commission for Europe Schooling and Regulatory Quality Regulatory quality Secondary school enrollment (% of age-group) Global Regulatory quality Secondary school enrollment (% of age-group) ECE

11. United Nations Economic Commission for Europe From Local to Global and from Global to Local: Different Levels in Regulatory Reform At the national level: many examples of best practice (Hungary, Baltic States, Canada, Iceland, Finland, Australia, etc.*) At the regional level: role of UNECE norms and standards At the global level: MDGs, Monterrey Consensus, Agenda 21 * Based on the EBRD transition and governance indicators, the World Bank Worldwide Governance Research Indicators Dataset, and the index of Economic Freedom of the World.

12. United Nations Economic Commission for Europe From global to regional: MDGs, UN Convention against Transnational Organized Crime From regional to global: Fundamental Principles of Official Statistics, Vehicle Regulations From region to region: TIR Convention, central bank independence, technological standards from Asia Different Directions in Regulatory Reform

13. United Nations Economic Commission for Europe Tapping the New Tools of the Information Society: The Role of Soft Regulation Advantages: flexibility, adaptability, user- friendliness, transparency, capacity to mobilize public opinion Examples : - Environmental Performance Reviews - MDGs - OECD peer review mechanism - The Open Method of Coordination in connection with the EU Lisbon Strategy A field where regional commissions have greatly contributed and can contribute more

14. United Nations Economic Commission for Europe The Role of Civil Society and the Private Sector Self-regulation in a vibrant democracy and a well- functioning market mechanism: stock exchanges, corporate social responsibility, codes of ethics Contribution of private sector to government regulations: e.g. CEFACT, customs regulations Risks and possible distortions - Big players versus small & medium enterprises - The ‘outsiders’: consumers, future generations, the most vulnerable groups, etc - Vested interests resisting reforms

15. United Nations Economic Commission for Europe Enhance the role of private players in national, regional and global governance Catalytic function of UNECE and other regional commissions in: - bridging national and global reforms - providing a forum for soft regulation and dialogue with business and civil society